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We’re in-line, for a change, but a little below on 2012.  Estimates have appropriately come down over the past month closer to ours.

WYNN should report EBITDA close to consensus, although Las Vegas remains the wildcard.  While positive catalysts remain elusive, 2012 estimates have come down to the point where we are only 3% below consensus and the stock has appropriately underperformed.  Undoubtedly, WYNN will continue to lose share in Macau in 2012 but that is well-known.  We’re positive on Vegas but MGM is the better play on that thesis.  So without a positive (new Asian market) or negative (further erosion of Macau share, emergence of a commission war, or slower growth in Macau) catalyst, this stock looks range bound.

For Q4, we are projecting $1.37BN of net revenue and $392MM of EBITDA.

Q4 Detail:

We estimate that Wynn Macau will produce $999MM of net revenue and $305MM of EBITDA (5% below consensus)

  • Net casino revenue of $936MM
    • $660MM of net VIP win
      • Assuming 10% direct play, RC volume of $29.4BN (up 7% YoY) and 3.2% hold
      • Rebate rate of 99bps or 30.5% on a rev share basis
      • Assuming theoretical hold of 2.85%, net revenues and EBITDA would be $77MM and $20MM lower, respectively
    • Mass win of $211MM, a 23% YoY increase
    • Slot win of $65MM, up 4% YoY 
  • $63MM of net non-gaming revenue
    • Room revenue: $31MM
    • F&B: $26MM
    • Retail & other: $50MM
    • Promotional allowances: $44MM
  • $562MM of variable expenses
    • $478MM of taxes
    • $72MM of gaming promoter expense assuming a blended commission rate 42.7%
  • Recorded non-gaming expenses of $24MM
  • Fixed expenses of $112MM compared to $110MM in 3Q and up 29% YoY

Projecting $373MM of net revenue and $107MM of EBITDA for Wynn Las Vegas (9% above consensus)

  • Net casino revenue of $157MM and operating margin of $83MM
    • Table win of $143MM
      • 10% increase in table drop to $621MM
      • 23% hold rate
    • $45MM of slot win
      • 3% increase in drop to $719MM
      • 6.2% win rate
    • $30MM discounts & rebates or 16% of gross casino win (compared to 17.4% in 3Q)
    • Casino expenses of $74MM, up 3% YoY compared to $71MM in 3Q11
  • $261MM of non-gaming revenue
    • Room revenue of $92MM
      • RevPAR: $209.50 (ADR: $250/ Occ: 84%)
      • CostPAR: $85.60
    • F&B: $108MM revenues at a 40% operating margin
    • Entertainment, retail, & other: $62MM at a 35% operating margin
    • $46MM of promotional spending or 29.5% of casino revenue
  • SG&A: $50MM (compared to $51MM last quarter)

Other assumptions:

  • Corporate expense: $20MM
  • D&A: $100MM
  • Stock comp: $6MM
  • Net interest expense: $56MM